Ambiguity in Policy Mandates Definition of “Occurrence”

When property owners purchase homeowner’s insurance to safeguard their financial future against liability claims, the notion of an “occurrence” must be understood to determine the proper amount of coverage. Every homeowner’s policy will provide compensation for covered perils, such as a liability claim for an attack by the family dog, up to a certain policy limit. This limit will apply on a “per occurrence” basis. In other words, a homeowner can file a separate claim when being sued by a dog bite victim two years after pursuing a claim for defense against a lawsuit for a slip and fall on the property. The insured could even seek coverage for the cost of defense and indemnification for a dog bite that occurs two years after a prior dog bite incident. However, the issue becomes far more complicated when multiple victims are injured in the same dog attack, or they suffer gunshot wounds in the same shootout.

The Florida 5th District Court of Appeals in Maddox v. Florida Federal Farm Bureau General, 129 So.3d 1179 (5th DCA 2014) recently addressed the issue of whether multiple victims during a single dog attack each have access to policy limits because their attacks constitute multiple “occurrences.” This issue was critical to the outcome of a case involving a woman who was attacked by her boyfriend’s dog while she tried to dislodge her son’s head from the canine’s jaw. The insurer contended that it was not obligated to provide coverage for the mother’s claim because the policy limits of $100,000 were exhausted paying the son’s claim. The trial court found the dog bite incidents were part of a single occurrence and granted the insurer’s motion for summary judgement.

The court noted that the policy defined “occurrence” as follows: “Occurrence means an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period in: (a) bodily injury or (b) property damage.”

The court considered several prior decisions that analyzed when multiple injuries during a single attack constitute separate occurrences. In the first case, American Indemnity v. McQuaig, two sheriff deputies were shot during a call at a private residence. The initial shot hit the first officer while the third shot struck a second officer. The second shot struck both officers. The insurer argued the shootings were separate occurrences based on the following: (1) a single instrumentality (the firearm) caused the injuries; (2) the injuries were caused at the same location; and (3) the injuries occurred within a short time period (i.e. under two minutes). The 5th DCA rejected these arguments and indicated that under the “cause theory” the question is whether “there was but one proximate, uninterrupted, and continuing cause which resulted in all of the injuries and damages.”

The court also analyzed its prior decision in Kolkos v. Travelers Ins. Co. which involved guests at a party who were struck by two “separate, but nearly concurrent rounds.” Two of the party guests were struck by a single bullet whereas three other guests were injured by other rounds. The Florida Supreme Court ruled that each shooting of a separate victim constituted a separate occurrence. The state’s highest court explained, “[I]t is the act that causes the damage, which is neither expected nor intended from the standpoint of the insured, that constitutes the ‘occurrence.’” The court rejected the insurer’s contention that the proximity in time and space supported a finding of a single occurrence.

Both court decisions discussed above noted that the policies were ambiguous since “occurrence” could reasonably be interpreted as referring to the entire attack or to each individual shot fired. Because ambiguity in the policy must be interpreted against the insurer that drafted the policy language, the court found that each shot fired was a separate occurrence.

The Maddox court found similar ambiguity in the policy and followed the reasoning in McQuaig and Kolkos in determining that the term “occurrence” could justifiably be interpreted as either the entire dog attack or the bite inflicted on each victim. Just as this ambiguity justified interpreting each shot as a separate occurrence, the court found that the bites inflicted on the son and mother were each distinct occurrences under the policy.

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